Refusal to Assign (Administrative Fee)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-23
CLNP Page ID:	1784
Page Categories:	[Contract Law, Leases, & Sub-Letting (LTB)]
Citation:	Refusal to Assign (Administrative Fee), CLNP 1784, <4N>, retrieved on 2024-11-23
Editor:	Sharvey
Last Updated:	2021/10/21

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Residential Tenancies Act, 2006, S.O. 2006, c. 17

95 (1) Subject to subsections (2), (3) and (6), and with the consent of the landlord, a tenant may assign a rental unit to another person. 2006, c. 17, s. 95 (1).

(2) If a tenant asks a landlord to consent to an assignment of a rental unit, the landlord may,

(a) consent to the assignment of the rental unit; or

(b) refuse consent to the assignment of the rental unit. 2006, c. 17, s. 95 (2).

(3) If a tenant asks a landlord to consent to the assignment of the rental unit to a potential assignee, the landlord may,

(a) consent to the assignment of the rental unit to the potential assignee;

(b) refuse consent to the assignment of the rental unit to the potential assignee; or

(c) refuse consent to the assignment of the rental unit. 2006, c. 17, s. 95 (3).

(4) A tenant may give the landlord a notice of termination under section 96 within 30 days after the date a request is made if,

(a) the tenant asks the landlord to consent to an assignment of the rental unit and the landlord refuses consent;

(b) the tenant asks the landlord to consent to an assignment of the rental unit and the landlord does not respond within seven days after the request is made;

(c) the tenant asks the landlord to consent to an assignment of the rental unit to a potential assignee and the landlord refuses consent to the assignment under clause (3) (c); or

(d) the tenant asks the landlord to consent to an assignment of the rental unit to a potential assignee and the landlord does not respond within seven days after the request is made. 2006, c. 17, s. 95 (4).

...

96 (1) A tenant may give notice of termination of a tenancy if the circumstances set out in subsection 95 (4) apply. 2006, c. 17, s. 96 (1).

(2) The date for termination specified in the notice shall be at least a number of days after the date of the notice that is the lesser of the notice period otherwise required under this Act and 30 days. 2006, c. 17, s. 96 (2).

General, O Reg 516/06

17. The following payments are exempt from subsections 134 (1) and (3) of the Act:

1. Payment for additional keys, remote entry devices or cards requested by the tenant, not greater than the direct costs.

2. Payment for replacement keys, remote entry devices or cards, not greater than the direct replacement costs, unless the replacement keys, remote entry devices or cards are required because the landlord, on the landlord’s initiative, changed the locks.

3. Payment of a refundable key, remote entry device or card deposit, not greater than the expected direct replacement costs.

4. Payment of NSF charges charged by a financial institution to the landlord.

5. Payment of an administration charge, not greater than $20, for an NSF cheque.

6. Payment by a tenant, former tenant, subtenant or former subtenant in settlement of a court action or potential court action or an application or potential application to the Board.

7. Payment to a landlord or tenant of a mobile home park or land lease community at the commencement of a tenancy as consideration for the rental of a particular site.

8. Payment of a charge not exceeding $250 for transferring, at the request of the tenant,

i. between rental units to which subsection 6 (1) or (3) of this Regulation applies, if the rental units are located in the same residential complex, or

ii. between rental units in a residential complex that is described in paragraph 1, 2, 3 or 4 of subsection 7 (1) of the Act.

9. Payment of an amount to reimburse the landlord for property taxes paid by the landlord with respect to a mobile home or a land lease home owned by the tenant. O. Reg. 516/06, s. 17; O. Reg. 562/17, s. 1.

EAT-05470-10 (Re), 2010 CanLII 37639 (ON LTB)

1. The Tenant paid a last month rent deposit of $800.00 on September 15, 2009.

2. The Tenant received $650.00 from the Landlord on or about March 10, 2010.

3. I find that the Tenant did assign her tenancy agreement as of March 1, 2010.

4. Subsection 95 (7) of the Residential Tenancies Act, 2006, (the ‘Act’) states:

“A landlord may charge a tenant only for the landlord’s reasonable out-of-pocket expenses incurred in giving consent to an assignment to a potential assignee.”

5. Paragraph 9 of the lease agreement signed by the Tenant states:

“The Tenant covenants not to assign or sublet the premises without the consent of the Landlord which shall not be arbitrarily or unreasonably withheld, and agrees to pay the Landlord’s reasonable expenses incurred thereby.”

6. I find that the Act supersedes the lease agreement.

7. Black’s law dictionary, fifth edition, defines “Out of pocket expense: a direct expense which requires the immediate outlay of cash in contrast to an accrued expense.”

8. I find that the Landlord’s everyday reasonable administrative expense is not an out of pocket expense.

9. I find that the Landlord did not provide the Board with any out of pocket expense receipts.

10. I find that the Landlord owes the Tenant $150.00 as part of her last month rent deposit

11. The Landlord failed to pay the Tenant the interest on last month's deposit as required by the Act.

12. The Landlord owes the Tenant the total amount $203.76. This amount represents $150.00 for part of the last month rent deposit, $45.00 for the cost of filing this application, $8.14 for the interest on the last month rent deposit ($800.00) from September 15, to March 10, 2010 and $0.62 for the interest on the part of the last month rent deposit ($150.00) from March 11, 2010 to May 20, 2010.

TST-26657-12 (Re), 2012 CanLII 36308 (ON LTB)

5. The Landlord asserts that the parties had a verbal agreement that in the event she was able to assign the unit to another tenant prior to April 30, 2012, she would retain the equivalent of one month’s rent. The Landlord submitted that she applied the LMR to February’s rent and as for the payment made by the Tenants in February she retained that amount as per their agreement. The Tenants testified that they had no recollection of any discussion involving any such fee.

6. There was insufficient evidence before me to support the Landlord’s claimed that the parties had agreed that she could retain the equivalent of one month’s rent if she found another tenant to re-rent the unit prior to April 30, 2012. That being said, even if the parties had agreed to the amount, by operation of subsection 95(7) of Residential Tenancies Act, 2006 (the ‘Act’): a landlord may charge a tenant only for the landlord’s reasonable out-of-pocket expenses incurred in giving consent to an assignment to a potential assignee. Section 3 of the Act states that the Act applies despite any agreement or waiver to the contrary. In other words a landlord can not just pick an amount arbitrarily to charge a tenant for costs relating to an assignment, it can only seek the reasonable out-of-pocket expenses incurred.

7. As a result, I find that the Landlord had received rental payments from the Tenants for the period ending February 29, 2012. The Tenants’ tenancy was effectively terminated on February 29, 2012 when the unit was re-rented for March 1, 2012. The Landlord has retained the Tenants' last month's rent deposit. This is prohibited by the Act.

8. The Landlord has also failed to pay the Tenants interest on last month's deposit, as required by the Residential Tenancies Act, 2006 (the 'Act').

CET-71073-17 (Re), 2018 CanLII 41824 (ON LTB)

24. The Tenants also seek reimbursement of $400 paid to the Landlord as a fee to arrange for an assignment of the tenancy.

25. The Tenants renewed their tenancy agreement until September 30, 2017. This is not in dispute.

26. The Tenants gave the Landlord notice to vacate on March 7, 2017 with a termination date of May 1, 2017. The earliest termination date the Tenants could give to the Landlord is September 30, 2017 in accordance with subsection 44(3) of the Act.

27. Subsection 95(7) of the Act permits a landlord to charge a tenant for the landlord’s reasonable out-of-pocket expenses incurred in giving consent to an assignment to a potential assignee.

28. HD submitted a letter from the Landlord dated March 22, 2017 in which the Landlord indicates that a fee of $400 is required to arrange for an assignment of the tenancy and this fee covers reasonable costs incurred for advertising, credit checks, leasing agent’s commission and the cost of preparing a new lease including legal costs. This letter explains to the Tenants that their notice to vacate is invalid and offers the Tenants an option for the Landlord to seek another tenant for the unit.

29. This evidence does not demonstrate that the Tenants were forced to pay an assignment fee. Moreover, the Landlord is entitled to reasonable out-of-pocket expenses pursuant to subsection 95(7) of the Act. I find the description of the costs as set out in the Landlord’s letter to be reasonable given the activities required to rent out a unit. This claim is dismissed.

TET-06146-19 (Re), 2020 CanLII 61182 (ON LTB)

10. When the Tenant asked to break the fixed-term lease, the Landlord had the option to say no. However, the Landlord did not exercise that option and agreed to the Tenant ’s request. Thus, the parties entered into an agreement to terminate the tenancy in accordance with section 37(3) of the Act. The question before me is whether the Act entitles the Landlord to charge or retain a fee for agreeing to terminate the tenancy.

11. Subsection 134(1) of the Act says:

134. (1) Unless otherwise prescribed, no landlord shall, directly or indirectly, with respect to any rental unit,

(a) collect or require or attempt to collect or require from a tenant or prospective tenant of the rental unit a fee, premium, commission, bonus, penalty, key deposit or other like amount of money whether or not the money is refundable;

12. This reads as an absolute prohibition against a landlord charging any kind of fee other than rent to a tenant. However, the section uses the phrase “unless otherwise prescribed” which means fees can be charged if they are specifically permitted in the regulations to the Act.

13. The exemptions to s. 134(1) are set out in section 17 of Ontario Regulation 516/06:

17. The following payments are exempt from section 134 of the Act:

1. Payment for additional keys, remote entry devices or cards requested by the tenant, not greater than the direct costs.

2. Payment for replacement keys, remote entry devices or cards, not greater than the direct replacement costs, unless the replacement keys, remote entry devices or cards are required because the landlord, on the landlord’s initiative, changed the locks.

3. Payment of a refundable key, remote entry device or card deposit, not greater than the expected direct replacement costs.

4. Payment of NSF charges charged by a financial institution to the landlord.

5. Payment of an administration charge, not greater than $20, for an NSF cheque.

6. Payment by a tenant, former tenant, subtenant or former subtenant in settlement of a court action or potential court action or an application or potential application to the Board.

7. Payment to a landlord or tenant of a mobile home park or land lease community at the commencement of a tenancy as consideration for the rental of a particular site.

8. Payment of a charge not exceeding $250 for transferring, at the request of the tenant,

i. between rental units to which subsection 6 (1) or (3) of this Regulation applies, if the rental units are located in the same residential complex, or

ii. between rental units in a residential complex that is described in paragraph 1, 2, 3 or 4 of subsection 7 (1) of the Act.

9. Payment of an amount to reimburse the landlord for property taxes paid by the landlord with respect to a mobile home or a land lease home owned by the tenant

14. The list of exemptions does not include a charge for entering into an agreement to terminate the tenancy.

15. Based on the documentary evidence before me, there was no evidence that the deduction of the $300.00 from the Tenant ’s deposit was in exchange of settling any potential court action.

16. Therefore, I find that the Landlord breached section 134 of Act by retaining $300.00 from the Tenant’s last month’s rent deposit as an administration fee for breaking the lease.

17. As the Tenant has been successful in her application, the Tenant is entitled to a reimbursement of the application filing fee.

18. This order contains all of the reasons for my decision within it. No further reasons shall be issued.

EAT-65287-17 (Re), 2017 CanLII 60252 (ON LTB)

1. The Tenant’s A2 application is not relevant or applicable to the circumstances in this case. As a result, it was dismissed at the hearing.

2. In this case, the Tenant was seeking consent from the Landlords to the general concept of an assignment before he began searching for any potential assignee. The Tenant’s own application confirms this. No actual person or potential assignee was ever presented to the Landlords. This is undisputed.

3. A distinction must be made between seeking the Landlords’ consent to the general concept of an assignment and seeking consent to assign to a particular person or potential assignee since there are different remedies, options or outcomes depending on the type of request.

4. Based on emails received from the Landlords and/or their lawyer in March/April 2017, the Tenant concluded that the Landlords had refused consent to assign the unit in general and he exercised the option available to him in subsections 95(4) and 96(1) of the Act. The Tenant gave the Landlords a N9 notice of termination dated April 12, 2017 with a termination date of May 12, 2017. The Tenant has vacated the rental unit.

5. The Tenant is now seeking an order from the Board determining that his notice was valid and that the tenancy was in fact terminated as of May 12, 2017.

6. This A2 application was filed under subsection 98(1) of the Act. That subsection states that the Tenant may file an application with the Board if the Landlords have arbitrarily or unreasonably refused consent to assign the rental unit to a potential assignee.

7. There is no dispute that this is not the situation here. No potential assignee was ever presented. The A2 application is therefore not applicable.

8. As established by subsection 95(2)(b) of the Act, a landlord is free to refuse consent to the general concept of an assignment. If this occurs then a tenant has the statutory right to give a notice of termination in accordance with subsection 95(4) of the Act. That is what the Tenant did in this case.

9. Obviously, if a landlord is permitted to refuse consent to the general concept of an assignment under subsection 95(2)(b) of the Act, it follows that there is no applicable application that can be filed seeking a determination that a landlord unreasonably refused consent. Whether reasonable or not, a landlord has the statutory right to refuse consent to the general concept of an assignment.

10. The Tenant was hoping to have the Board determine that his notice of termination is valid for the purposes of defending against a Small Claims Court action that the Landlords have brought against the Tenant for unpaid rent.

11. The Tenant will have to make that argument or mount that defence before the Court. There is no application that he can file with the Board for the remedy that he is seeking.

12. If the Tenant was still in possession of the rental unit (as required under subsection 87(1)(b) of the Act) and the Landlords had filed an application with the Board for rent arrears, then the Board would have had to make a determination regarding the validity of the Tenant’s notice in order to determine if rent is actually owing to the Landlords under the rent arrears application. However, there is no relevant Tenant’s application that the Tenant can file with the Board for the remedy he is seeking.

EAT-30066-13 (Re), 2013 CanLII 18262 (ON LTB)

1. After hearing submissions from both parties, I find that the Landlord’s clause in the contract contravenes subsection 95(7) of the Residential Tenancies Act, 2006. The amount of $1,750.00 is not a reasonable out –of- pocket expense incurred by the Landlord in giving consent to an assignment.